US STOCKS-Wall Street stocks edge lower with sentiment weakened by Moody's downgrade

Updates to 2:30 p.m. ET

By Chibuike Oguh

May 19 (Reuters) - U.S. stocks were mostly lower in choppy trading on Monday with market sentiment weakened by the downgrade of the federal government's perfect sovereign credit rating owing to its huge debt profile.

Moody's slashed the U.S. sovereign credit rating to "Aa1" from "Aaa" after markets closed on Friday, citing the government's $36 trillion outstanding debt and interest.

Benchmark S&P 500 and the Nasdaq were losing ground in choppy trading. The Dow was trading higher.

Energy .SPNY stocks were the biggest losers in addition to consumer discretionary .SPLRCD and technology .SPLRCT stocks. Six out of the 11 S&P sectors were advancing led by healthcare .SPXHC, industrials .SPLRCI, materials .SPLRCM and utilities .SPLRCU stocks.

"It is to be understood that markets were going to have a little bit of reaction because the (Moody's) announcement was after markets closed," said Talley Leger, chief market strategist at The Wealth Consulting Group. "But my view is that the 'sell-America' trade is overdone."

At 2:05 p.m., the Dow Jones Industrial Average .DJI rose 101.99 points, or 0.23%, to 42,756.73, the S&P 500 .SPX lost 1.25 points, or 0.02%, to 5,957.07 and the Nasdaq Composite .IXIC lost 21.44 points, or 0.11%, to 19,189.66.

Megacap technology stocks, including Apple AAPL.O, Tesla TSLA.O, and Alphabet GOOGL.O were trading lower.

Benchmark 10-year Treasury yields gained on concerns that a U.S. tax bill will increase the debt load by more than previously expected. The yield on benchmark U.S. 10-year notes US10YT=RR rose 4.4 basis points to 4.481%.

President Donald Trump's sweeping tax-cut bill had won approval from a key congressional committee on Sunday.

TXNM Energy TXNM.N rose 7% after the utility said it would be acquired by the infrastructure unit of Blackstone BX.N in an $11.5-billion deal.

Novavax NVAX.O shares jumped more than 15% after the company secured a long-awaited U.S. regulatory approval for its COVID-19 vaccine.

Declining issues outnumbered advancers by a 1.46-to-1 ratio on the NYSE. The S&P 500 posted 26 new 52-week highs and no new lows while the Nasdaq Composite recorded 49 new highs and 50 new lows.

(Reporting by Chibuike Oguh in New York; additional reporting by Shashwat Chauhan and Kanchana Chakravarty in Bengaluru; Editing by Varun H K, Pooja Desai and Aurora Ellis)

((Chibuike.Oguh@thomsonreuters.com; +332-219-1834; Reuters Messaging: chibuike.oguh.thomsonreuters.com@reuters.net))